It seems the Japanese economy is on the up again as official data
released today has shown that machinery orders in the country jumped
quicker than predicted in November.
One of the best indicators of investment in the industrial sector is
core machinery orders. Reports show these figures were up nearly four
percent in November from the previous month’s orders.
Many analysts see this data as confirmation of a growing view that the
nation’s latest economic upswing will be more due to corporate spending
as opposed to public spending in the coming year.
Other experts observing events are not as sure the core orders are such a
decisive factor, and many doubt that the better than predicted figures
released today and last week will spur the BOJ to raise interest rates.
The central bank will meet next week to discuss the issue.
Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management
said, “I’m not convinced the data we have seen over the last few days
is going to force the BOJ’s hand on interest rates. I think they will
take a much broader view of the economic landscape before making any
major decisions.”
Others, like chief of FX sales and trading at Societe Generale Hidenori
Kato, believe machinery orders will be “the big factor” that will bring
in increased rates.
The Bank of Japan meets on the 14th to decide whether or not to move
rates from their current 0.25 percent level. That rate was set in August
2007 after a run of over 5 years with a zero interest rate economic
policy.
